House prices are still ridiculously high in my neck of the woods so I approached a local farmer about buying an acre site off him.
He said he would sell me a site, I asked him what price he had in his head and he said obviously the market value. I was about to say that there is no “market value” at the moment, but he quickly said there was no point talking money until i had a good idea if planning would be granted. Fair point.
I subsequently met with the council and they said I have a good shot at getting the planning.
I am now going back to the farmer with this information. By my reckoning I think that the site is worth no more than €30k. In the late 90’s sites in this area were selling for about 20k. However, 3 years ago, the famer was in the process of selling this land (11 acres in total) to a dublin developer for 4.5 million. Sale fell through as the planner could not get planning permission. The farmer in question knows the market has fallen, he is no fool and is not short of a bob or two (sold other land in 2005 to a developer).
I know I am going to have to haggle with this guy. Any suggestions as to how to go about this?
Houses in my area are still way over priced. I have been renting for the last two years and see no end in sight !!
I thought if I was building I would get the house I want. With the cost of labour going down and all those surplus tradesmen available I could build far cheaper than buying. Have a few tradesmen in the family so was planning to build using direct labour.
However, if I have to pay over the odds for the site that puts a different slant on things.
Do you mind revealing what county you’re looking to build in? Are you looking to buy subject to planning, or would be prepared to buy a site with outline or full planning. How about an unfinished site? Or a run-down/derelict dwelling? If you want to gauge the value of a green field site then you need to look at the value of these other options too.
Personally, I believe that sites are worthless. House prices will fall below the cost of construction.
Im based in the midlands in an area that became flooded with housing estates because of the so called excellent train service to Dublin.
The town has little to offer except houses and pubs. little employment, poor shopping facilities etc.
I hope to buy the site subject to planning permission. I stand a good chance of getting the planning or so I’m told by the council.
I wouldn’t consider buying a site that has outline or full planning on it as they are just too expensive. One currently on the market in a nicer location than where im looking but still only 4 miles away for €250k, gone sale agreed for €150k. Mad money.
Currently, there are no old houses in need of modernisation on the market in the area I want to live.
I need to be able to agree a price with this farmer, but I’m worried that i won’t be able to get my point accross about the current market, recession etc, i.e. all the sensible,valuable information I have heeded from reading the pin.
If you are buying the site ‘subject to planning’ then YOU are the one adding value to the land, not the farmer. Sure, he deserves a premium for giving you the opportunity to add that value, but only a fraction of it. If there are a number of people who are also eligible for planning and are interested in that particular piece of land, then the farmers ‘fraction’ increases. Supply and demand etc… I would imagine that this is not the case, however, as there is no shortage of sites available across the country, and a very real shortage of credit.
All this assumes that the farmer needs to sell the land, but if he doesn’t, then he can command any price he likes. It’s up to you to decide if you are willing to pay that price.
Go to Tesco’s and find out the price of a turnip. Multiply that by the amount of turnips you could grow on his site. Subtract labour costs incurred and bingo, you’ll have a value for your site. Not the most scientific approach but unlike an EA, you’ll be able to explain how you arrived at your figure…
A ha, got ya now. Yeh I’d be willing to sign that. I think he would expect me to, cos he said to me that if he sold me a site and a couple of years down the line another house/development was submitted for planning on the rest of his land i could object and then he wouldn’t be able to sell that land.
As i said, this man is no fool but i think he is also fair, I’m just afraid that he is still living in the land of 2006 prices. I didn’t get anywhere near talking about price because he was adamant that I find out if I’m eligable for planning first.
Any idea what the council’s policy is on land sterilisation where you want to buy? He may find himself in a position that if he sells you a one acre site, he could have to agree not to sell sites around yours - so your 30k would be a poor return for him in the long run. We built on our own land in the Midlands and any land around the house is sterilised now.
He’s probably sussing out what other sites (if any!) in the area are going for, which is why he won’t talk money with you. You’ll be buying the site subject to planning anyhow, one presumes…
Would you have said that if he was a brain surgeon or an investment banker. It’s a perfectly honourable livelihood and you’re betraying a certain misplaced snobbery in your comment.
Well then don’t pay over €40k.
You’re not adding value to the land. You’re putting an ostensibly non-productive asset on the land. He owns land that you want to buy. He or his family may have farmed that land for generations. There is no reason to believe he should sell that land for anything resembling it’s agricultural value. He should extract from you at most the maximum you’re willing to pay and at least the minimum he’s willing to sell for. What the market says about properties in Monasterevin or elsewhere is irrelevant to the price agreed. Bid what you’re willing to pay and hope he accepts or bid what you think he might accept and hope he does.
Gilroy, my comment about the cattle and tractor was only said in jest! No snobbery there whatsoever, I know this man nearly all my life and have good respect for him.
The council in question got into some trouble about 6 years ago for going over board on the sterilisations and so have greatly relaxed these clauses since then. My father was made to sterilise land when my sister got planning permission and 2 years down the line my other sister applied for planning on the sterilised land. It was lifted immediately and she got the planning permission first time round!!
My guess is you’ll not get the site next or near what you’re willing to pay I’m afraid. I put an ad in our local rag looking for a site with “current market prices expected”. A completely vague and open ended statement I know, but I thought it was worth a shot… a worthwhile little experiment but the replies were ridiculous… nay, hilarious.
My suggestion is, when he gives you his version of events and associated super-inflated (turnips are worth €299 each) price… be sitting down… on a toilet… you’ll be likely to shite yourself laughing.